The UK'S financial watchdog is considering whether to take further action against Ulster Bank owner RBS over its treatment of small businesses.

The Financial Conduct Authority (FCA) has published its interim report into the treatment of small businesses shifted into Royal Bank of Scotland's (RBS) Global Restructuring Group (GRG), and said that it is still investigating the lender.

The FCA identified a number of failings at RBS, but said the bank had not engaged in the "systematic inappropriate treatment of customers".

Hundreds of former Ulster Bank customers are thought to be among those due compensation amid "systematic" failings by RBS, highlighted in a previous report.

But in a statement, FCA chief executive Andrew Bailey said: "As we reported in November 2016, while the most serious allegations were not upheld by the Skilled Person, the report did identify other concerns about the treatment of SME customers.

"We are investigating the matters arising from the Skilled Person's Report and are focusing on whether there is any basis for further action within our powers. We cannot comment any further on this."

RBS said it was pleased that the "most serious allegations made against the bank have not been upheld".

The state backed lender has been dogged by allegations that it intentionally pushed businesses towards failure in hopes of picking up their assets on the cheap.

The FCA's report comes after Nicky Morgan, chair of the Treasury Select Committee, ramped up pressure on the financial watchdog to publish details of misconduct by RBS and threatened to use "formal powers" to demand publication of the full leaked report into the lender.

Mr Bailey added: "RBS has accepted that it did not meet the standards it set for itself which impacted on how it treated some of its SME customers. RBS has since taken voluntary steps, such as its proactive review of complex fees, and setting up a complaints scheme for eligible SME customers, overseen by an independent monitor, Sir William Blackburne."

Last November, RBS said it would put aside £400m as part of a plan to refund small and medium-sized businesses following allegations that they were mistreated by GRG.

The FCA, which helped develop plans for the compensation and new complaints process, said at the time these were the "appropriate steps for RBS to take".

RBS chief executive Ross McEwansaid: "I am pleased the regulator has confirmed the findings from last November and that the most serious allegations against the bank have not been upheld.

"We have acknowledged for some time that mistakes were made and have apologised that we did not always provide the level of service and understanding we should have done for these customers in the aftermath of the financial crisis."